Choi, Kangsik (2010): The Timing of Endogenous Wage Setting under Bertrand Competition in a Unionized Mixed Duopoly.
Download (185Kb) | Preview
The paper examines the timing of endogenous wage setting under Bertrand competition in a unionized mixed duopoly. The results are that when the public firm chooses the timing of wage setting: (1) sequential wage setting is the outcome and (2) simultaneous wage setting is the outcome. The first result coincides with the choices of the private firm, its union, and the union of the public firm if imperfect substitutability is sufficiently large. This result is in contrast to the findings of prior literature. However, but the second result does not coincide between firms and their unions if imperfect substitutability is sufficiently small. However, simultaneous wage setting is more likely to improve the welfare if imperfect substitutability is sufficiently small. Furthermore, we find that the impact of sequential wage setting on the equilibrium path is lower in terms of improving welfare than the other outcome of sequential wage setting.
|Item Type:||MPRA Paper|
|Original Title:||The Timing of Endogenous Wage Setting under Bertrand Competition in a Unionized Mixed Duopoly|
|Keywords:||Endogenous Wage Setting, Bertrand Competition, Mixed Duopoly, Social Welfare.|
|Subjects:||D - Microeconomics > D2 - Production and Organizations > D21 - Firm Behavior: Theory
J - Labor and Demographic Economics > J5 - Labor-Management Relations, Trade Unions, and Collective Bargaining > J51 - Trade Unions: Objectives, Structure, and Effects
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets
H - Public Economics > H4 - Publicly Provided Goods > H44 - Publicly Provided Goods: Mixed Markets
|Depositing User:||Kangsik Choi|
|Date Deposited:||22. Jan 2010 15:34|
|Last Modified:||20. Feb 2013 00:14|
Barcena-Ruiz, J. C. and M. L. Campo, 2000, ``Short-term or Long-term Labor Contracts," Labour Economics, 7, 249-260.
Barcena-Ruiz, J. C. and M. L. Campo, 2009, ``R&D Investments and Sequential Wage Negotiations," Australian Economic Papers, 48, 183-202.
Barcena-Ruiz, J. C. and F. J. Casado-Izaga, 2008, ``Timing in Endogenous Bargaining Over Costs and Firm Location," Journal of Economics, 95, 149-166.
Barcena-Ruiz, J. C. and M. B. Garzon, 2009, ``Relocation and Public Ownership of Firms," Journal of the Japanese and International Economies, 23, 71-85.
Booth, A., 1995, The Economics of the Trade Union, Cambridge, Cambridge University Press.
Brekke, K. and O. R. Straume, 2004, ``Bilateral Monopolies and Location Choice," Regional Science and Urban Economics, 34, 275-288.
Corneo, G., 1995, ``National Wage Bargaining in an International Integrated Product Markets," European Journal of Political Economy, 11, 503-520.
De Fraja, G., 1993a, ``Staggered vs. Synchronized Wage Setting in Oligopoly," European Economic Review, 37, 1507-1522.
De Fraja, G., 1993b, ``Union and Wages in Public and Private Firms: A Game Theoretic Analysis," Oxford Economic Papers, 45, 457-469.
Haskel, J. and A. Sanchis, 1995, ``Privatisation and X-Inefficiency: A Bargaining Approach," Journal of Industrial Economics, 43, 301-321.
Haskel, J. and S. Szymanski, 1993, ``Privatization, Liberalization, Wages and Employment: Theory and Evidence for the UK," Economica, 60, 161-182.
Haucap, J. and C. Wey, 2004,``Unionisation Structures and Innovation Incentives," Economic Journal, 114: C149-C465.
Ishida, J. and N. Matsushima, 2008, ``Outward FDI in Unionized Oligopoly: Welfare and Policy Implications," Osaka University, OSIPP Discussion Paper DP-2008-E-005.
Ishida, J. and N. Matsushima, 2009, ``Should Civil Servants be Restricted in Wage Bargaining? A Mixed-Duopoly Approach," Journal of Public Economics, 93, 634-646.
Leahy, D. and C. Montagna, 2000, ``Unionisation and Foreign Direct Investment: Challenging Conventional Wisdom?" Economic Journal, 110, C80-C92.
Lommerud, K. E., F. Meland, and L. Sorgard 2003,``Unionised Oligopoly, Trade Liberalisation and Location Choice," Economic Journal, 113, 782-800.
Mukherjee, A. and K. Suetrong, 2007,``Unionisation Structure and Strategic Foreign Direct Investment," GEP Research Paper Series 2007/22, University of Nottingham.
Naylor, R. A., 1998,``International Trade and Economic Integration when Labour Markets are Generally Unionised," European Economic Review, 42, 1251-1267.
Naylor, R. A., 1999,``Wage Union Strategies and International Trade," Economic Journal, 109, 102-125.
Naylor, R. A., 2002,``Industry Profits and Competition under Bilateral Oligopoly," Economics Letters,77, 169-175.
Naylor, R. A. and M. Santoni, 2003,``Foreign Direct Investment and Wage Bargaining," Journal of International Trade and Economic Development, 12, 1-18.
Oswald, A, J. and P. Turnbull, 1985, ``Pay and Employment Determination in Britain: What are Labour Contracts Really Like," Oxford Review of Economic Policy, 1, 80-97.
Skaksen, J. R., 2004, ``International Outsourcing when Labour Markets are Unionized," Canadian Journal of Economics, 37, 78-94.
Skaksen, M. Y. and J. R. Sorensen, 2001, ``Should Trade Union Appreciate Foreign Direct Investment?," Journal of International Economics, 55, 379-390.
Straume, O. R., 2003, ``International Merger and Trade Liberalization: Implications for Unionized Labour," International Journal of Industrial Organization, 21, 717-735.